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    Ch03 - Sales Opportunity Management

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    This document discusses sales opportunity management. It begins by looking at generating new accounts versus managing existing accounts, and the balance between sales and profits. It then examines prospect profiling, opportunity assessment, developing prospect lists, and qualifying prospects. Several models for setting account priorities are presented, including single-factor, portfolio, and decision models. Account classification examples like ABC are shown. The document closes by discussing systematic biases salespeople may have and when they are most likely to exist.

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    Ch03 - Sales Opportunity Management

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    api-3706464
    1K views28 pages
    This document discusses sales opportunity management. It begins by looking at generating new accounts versus managing existing accounts, and the balance between sales and profits. It then examines prospect profiling, opportunity assessment, developing prospect lists, and qualifying prospects. Several models for setting account priorities are presented, including single-factor, portfolio, and decision models. Account classification examples like ABC are shown. The document closes by discussing systematic biases salespeople may have and when they are most likely to exist.

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    This document discusses sales opportunity management. It begins by looking at generating new accounts versus managing existing accounts, and the balance between sales and profits. It then examines prospect profiling, opportunity assessment, developing prospect lists, and qualifying prospects. Several models for setting account priorities are presented, including single-factor, portfolio, and decision models. Account classification examples like ABC are shown. The document closes by discussing systematic biases salespeople may have and when they are most likely to exist.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    1K views28 pages

    Ch03 - Sales Opportunity Management

    Uploaded by

    api-3706464
    This document discusses sales opportunity management. It begins by looking at generating new accounts versus managing existing accounts, and the balance between sales and profits. It then examines prospect profiling, opportunity assessment, developing prospect lists, and qualifying prospects. Several models for setting account priorities are presented, including single-factor, portfolio, and decision models. Account classification examples like ABC are shown. The document closes by discussing systematic biases salespeople may have and when they are most likely to exist.

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    Part II

    SALES FORCE
    ACTIVITIES

    Chapter 3:
    Sales Opportunity in
    Management
    Sales Opportunity Management

    Generating Managing Sales Personal


    New Existing Versus Time
    Accounts Accounts Profits Management
    Generating New
    Accounts
    What Creates
    Satisfied Customers?
    Mergers and
    Acquisitions

    10%
    42% Acquiring
    Introducing New Customers
    15%
    New Products

    42%

    Increasing
    Business with
    Existing Customers
    Prospect Profile

    Disposable Medical Supply


    Distributor
     Multiple-practice physician office
     Internal medicine, family practice
     Suburban location
     New practice -- less than 5 years
     Good credit history
     Currently purchases from a full-service
    distributor
    Siebel Systems, Inc.:
    Opportunity Assessment

    Is There an Opportunity?
    Customer’s Application or
    1
    Project
    2 Customer’s Business Profile
    Customer’s Financial
    3
    Condition
    4 Access to Funds
    5 Compelling Event
    Developing a Prospect
    List

    1. Direct Inquiry
    Advertising
    Direct Mail
    Trade publications
    Trade shows
    2. Directories – Thomas
    Register
    3. Referrals
    4. Cold Canvassing
    Qualifying Prospects

    1. Needs for your products/services


    2. Authority to make purchase
    3. Credit rating & ability to pay
    4. Rating scale applied to
    characteristics by each
    salesperson
    Siebel Systems, Inc.:
    Assessing the Opportunity

    Is There an Opportunity? Can We Compete?


    Customer’s Application or 6 Formal Decision Criteria
    1
    Project
    2 Customer’s Business Profile 7 Solution Fit
    Customer’s Financial
    3 8 Sales Resource Requirements
    Condition
    4 Access to Funds 9 Current Relationship
    5 Compelling Event 10 Unique Business Value

    Can We Win? Is it Worth Winning?


    11 Inside Support 16 Short-Term Revenue

    12 Executive Credibility 17 Future Revenue

    13 Cultural Compatibility 18 Profitability

    14 Informal Decision Criteria 19 Degree of Risk

    15 Political Alignment 20 Strategic Value


    Managing Existing
    Accounts

    Is the account too small?


    Computing the Cost per Call for an Industrial Products
    Table 3-1
    Salesperson
    Compensation
    Salary, commissions, and bonus $69,035
    Fringe benefits (hospital, life insurance, social security) $10,985 $80,020
    Direct Selling Expenses

    Automobile 8,000
    Lodging and meals 6,250
    Entertainment 3,250
    Communications 4,500
    Samples, promotional material 1,750
    Miscellaneous 1,700 25,450
    Total Direct Expenses $105,470
    Calls Per Year
    Total available days 260 days
    Less:
    Vacation 10 days
    Holidays 10 days
    Sickness 5 days
    Meetings 18 days
    Training 12 days 55 days
    Net Selling Days 205 days
    Average calls per day 3 calls
    Total Calls per Year (205 X 3) 615 Calls
    Average Cost per Call ($105,470/615) $171.50
    Sales Opportunity
    Management
    Key to Productivity

    Breakeven Sales Volume

    (Cost per Call) x (Number of Calls to Close)


    Sales Calls as a % of Sales
    Table 3-2
    Selected Statistics on Cost per Call
    and Number of Calls Needed to Close
    a Sale Sales Costs as
    a
    Number of
    Cost Calls Needed Percentage of
    Industry per Call to Close a Sale Total Sales
    Business Services $ 46.00 4.6 10.3%
    Chemicals 165.80 2.8 3.4
    Construction 111.20 2.8 7.2
    Electronics 133.30 3.9 12.6
    Food Products 131.60 4.8 2.7
    Instruments 226.00 5.3 14.8
    Machinery 68.50 3.0 11.3
    Office Equipment 25.00 3.7 2.4
    Printing/Publishin
    g 70.10 4.5 22.2
    Rubber/Plastic 248.20 4.7 3.6
    Sales Opportunity
    Management
    Selected Break-Even Results

    Industry Breakeven
    Business Services 1,096.37
    Chemicals 15,474.67
    Construction 9,730.00
    Electronics 433.25
    Food Products 6,580.00
    Instruments 11,629.13
    Machinery 1,580.77
    Office Equipment 616.67
    Printing/Publishing 3,811.61
    Rubber/Plastics 41,662.14
    Now what?

    Setting Priorities?
    Methods for Setting
    Account Priorities

     Single-Factor Model
     Portfolio Models
     Decision Models
     Sales Process Models
    ABC Account
    Classification (Single
    Factor Model)
    # of Total Total
    Account Account Account Sales Total Calls per Sales
    Classif. s s (000) Sales Classif. ($) per
    (1) (2) (3) (4) (5) Call (6)

    $866
    A 21 15% $910 65% 105
    7
    $200
    B 28 20% $280 20% 140
    0
    C 91 65% $210 15% 455 $462
    $200
    Totals 140 100% $1400 100% 700 0
    (Avg.)
    Portfolio Model
    Competitive Position

    Strong Weak
    Growth
    Core Accounts
     Accounts are Very
    Accounts
    High Attractive Accounts are
     Invest Heavily in Potentially Attractive
    Account Selling Resources May Want to Invest
    Heavily
    Opportunit Problem
    y
    Drag Accounts
     Accounts are Accounts
    Low moderately Attractive Accounts are Very
     Invest to maintain Unattractive
    current competitive Minimal Investment of
    Customer Break-Even
    Analysis
    (Decision Models)
    Average Sales Volume Per Month
    $9,784

    $8,153

    $6,522 C
    $4,891

    $3,261
    A
    $1,630
    B
    1 2 3 4 5 6
    Number of Sales
    Calls Per Month
    How Dell Achieves Selling
    Efficiencies
    (Example of Sales Process Model)
    Traditional Model Internet Model
    100,000 100,000
    Catalog Drops Website Visits

    5,000
    10,000
    Calls
    Calls

    2,000 500 1,750


    Orders E-Orders Orders
    Big Difference?
    When Systematic Biases
    Are Likely to Exist
    Source of Salespeople Who… Are More Likely To
    Bias
    Customer Have low-sales Spend too much time with
    potential, demanding them.
    customers
    Have customers with Focus on customers whose
    high service needs or needs they can easily meet on
    needs that the their own.
    salesperson can’t meet
    on his or her own
    Company Have territories with too Have low penetration or share
    many high-sales as a result of poor coverage.
    potential accounts

    Have little information Spend their effort where the


    about the potential of current sales are highest.
    different accounts

    Have very little cash Expend too little energy


    compensation at risk in customizing sales actions for
    the incentive plan individual customers.
    When Systematic Biases
    Are Likely to Exist (cont.)

    Source of Salespeople Who… Are More Likely To


    Bias Are managed by the Spend too much time with
    Sales
    number of calls they friendly customers
    Manager make irrespective of potential.
    Are left alone to decide Have high variability in the
    what to do quality of precision selling

    Salesperson Have difficulty handling Shy away from difficult


    rejection and customer accounts.
    objections

    Are making good Seek the high-probability, low


    progress toward making volume account.
    quota
    Have made quota Seek the low-probability, high
    relatively early in the volume account.
    period
    Time Allocation
    Time Allocation

     As a salesperson for Strength Footwear, Inc., you


    have been very successful.
     Your commissions are well over $70,000 a year.
    Demand for your product line is very strong, but
    so is the demand on your time.
     You work your territory 220 days a year and can
    make 4 calls a day. The maximum number of
    times you need to see any account is every other
    week, but you need to call on each account at
    least once a quarter.
     To help you allocate your time according to sales
    results, you have gathered the following
    information on customer sales:
    Time Allocation: Customer Sales

    Strength Footwear, Inc.


    Sales Last
     Develop and
    Accounts Year justify a call
    Top 10 $150,000 schedule for
    allocating
    Next 10 best 56,250 time across
    Next 10 best 55,500 the 110
    customers in
    Next 20 best 37,500 your territory.
    Next 20 best 37,500
     What
    Next 20 best 18,750 additional
    Last 20 15,000 information
    should you
    $370,000
    consider in
    allocating
    your time?
    Time Allocation Analysis
    Number of Total Sales Percent Percent Sales per
    Accounts Volume of Sales of Account Account
    10 $150,000 40.5% 9% $15,000
    10 56,250 15.2 9 5,625
    10 55,500 15.0 9 5,550
    20 37,500 10.1 18 1,875
    20 37,000 10.0 18 1,850
    20 18,750 5.1 18 938
    20 15,000 4.1 18 750
    110 $370,000 100.0% 99% $ 3,364

    Total Number Percent Sales


    Accounts Call Pattern of Calls Of Calls Per Call
    Top 10 Every other week 260 29.6% $576.92
    Next 10 Once a month 120 13.6 468.75
    Next 10 Once a month 120 23.6 462.50
    Next 20 About every 2 110 12.5 340.91
    mos.
    Next 20 About every 2 110 12.5 336.36
    mos.
    Next 20 Once a quarter 80 9.1 234.38
    Last 20 Once a quarter 80 9.1 187.50
    880 100.0% $420.45
    Time Management

    Importance
    High Low

    H
    Emergencies Time Wasters
    igh
    Urgenc
    y
    Personal
    Low Recreation
    Growth

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